Arizona HOA Assessment Limits & Penalties: A.R.S. 33-1803

What the law covers

Arizona Revised Statutes Section 33-1803 establishes rules regarding regular assessment increases, late charges, monetary penalties for community document violations, and procedures for written notices of violation. Note that the association's governing documents and later amendments may also apply if they set lower limits or longer time periods.

Key requirements and limits

The statute outlines specific financial caps and rules for associations:

• Regular Assessments: An association cannot increase regular assessments by more than twenty percent above the previous fiscal year's assessment without approval from a majority of the members, unless community documents mandate a lower limit.
• Assessment Late Fees: Charges for late payments are limited to the greater of fifteen dollars or ten percent of the unpaid assessment. A payment is considered late if unpaid fifteen or more days after its due date (unless documents grant longer). Late charges require prior notice that the assessment is overdue or will be considered overdue after a set date.
• Application of Payments: Monies paid for an unpaid assessment or penalty must be applied first to the principal unpaid amount and second to accrued interest.
• Monetary Penalties: After notice and an opportunity to be heard, the board may impose reasonable monetary penalties for violations. Late charges on penalties cannot exceed the greater of fifteen dollars or ten percent of the unpaid penalty.

Notice, hearing and deadlines

When an association sends written notice of a property condition violation:

• Member Response: The homeowner may respond in writing by certified mail within twenty-one calendar days after the date of the notice.
• Association Explanation: Within ten business days after receiving the certified mail response, the association must provide a written explanation that includes: the specific provision allegedly violated, the date of observation, the first and last name of the observer, and the process to contest the notice.
• Enforcement Restrictions: Unless contest process information was included in the original notice, the association cannot proceed with enforcement actions or attorney fee collections during the specified exchange period. The association must also provide written notice of the member's option to petition for an administrative hearing with the state real estate department pursuant to section 32-2199.01.

Practical checklist for homeowners

• Read your community's governing documents and any later amendments to understand specific local rules and limits.
• Keep copies of all written notices received from the association, including postmarks and dates.
• Send any violation responses by certified mail to the address listed on the notice within twenty-one calendar days.
• Keep certified mail receipts and delivery confirmation records.
• Check the official text for updates or changes regarding administrative hearing procedures under section 32-2199.01.